A. NK-2 Homeobox Gene. The NK-2 homeobox gene is expressed in nuclei in the ventral half of the ventrolateral neurogenic anlage very early in the development of part of the CNS of Drosophila. The distribution of NK-2 RNA in various mutants was determined to identify genes that regulate NK-2 expression. Four genes were found that encode DNA binding proteins that regulate NK-2 gene expression. In addition, the 5'-flanking region of the NK-2 gene was shown to contain many binding sites for NK-2 protein, which suggests that NK-2 protein may be required to maintain NK-2 gene expression. These results suggest that the NK-2 gene receives and integrates information from the ventral-dorsal and anterior-posterior gradients of gene regulators to generate a pattern of clusters of neuroectodermal cells that synthesize NK-2 RNA and are precursors of different types of neuroblasts. The NK-2 homeodomain was shown by NMR to have a novel secondary structure. B. Gene Expression in the Developing Nervous System. A Drosophila gene was found that encodes a novel zinc finger protein that is restricted to the CNS. Homozygous P-element insertions are lethal and are accompanied by massive morphological defects in the ventral nerve cord. Another CDNA clone was identified as a DNA binding protein which is widely distributed during early embryonic development, but is expressed exclusively in the nervous system during later embryonic development. Another CDNA clone was found that corresponds to a Drosophila gene that encodes a novel member of the kinesin heavy chain gene family. Other CDNAS were found that correspond to genes that encode novel proteins that are specifically expressed in the developing nervous system.